WeightWatchers 2010 Annual Report Download - page 92

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIE
S
NO
TE
S
T
OCO
N
SO
LIDATED FINAN
C
IAL
S
TATEMENT
S
(
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
)
On June 19, 2008, the Company acquired substantially all of the assets of two of its franchisees, Weigh
t
W
atchers of Syracuse, Inc. and Dieters of the Southern Tier, Inc., for a combined net purchase price of
$
20,935,
p
lus assumed liabilities and transaction costs of
$
164. The total
p
urchase
p
rice has been allocated to franchis
e
r
ights acquired (
$
20,948), fixed assets (
$
36), inventory (
$
56) and prepaid expenses (
$
59).
T
h
ee
ff
ects o
f
t
h
ese
f
ranc
hi
se acqu
i
s
i
t
i
ons,
i
n
di
v
id
ua
lly
or
i
nt
h
ea
gg
re
g
ate, were not mater
i
a
l
to t
he
Compan
y
’s conso
lid
ate
dfi
nanc
i
a
l
pos
i
t
i
on, resu
l
ts o
f
operat
i
ons, or operat
i
n
g
cas
hfl
ows
i
nan
y
o
f
t
h
e per
i
o
ds
p
resente
d
.
4. Jo
i
nt Venture
On February
5
, 2008, Weight Watchers Asia Holdings Ltd. (“Weight Watchers Asia”), a direct, wholly-
o
wned subsidiary of the Company, and Danone Dairy Asia, an indirect, wholly-owned subsidiary of Groupe
DANONE S.A., entered into a joint venture agreement to establish a weight management business in th
e
People’s Republic of China. Pursuant to the terms of the joint venture agreement, Weight Watchers Asia and
Danone Dairy Asia own
5
1% and 49%, respectively, of the joint venture entity, Weight Watchers Danone China
Limited.
Because t
h
e Compan
yh
as a
di
rect contro
lli
n
gfi
nanc
i
a
li
nterest
i
nt
h
eJo
i
nt Venture,
i
t
b
e
g
an to conso
lid
at
e
t
hi
s ent
i
t
yi
nt
h
e
fi
rst quarter o
ffi
sca
l
2008.
5.
G
oodw
i
ll and
O
ther Intang
i
ble Asset
s
The Company performed its annual impairment review of goodwill and other indefinite-lived intangible
assets as of January 1, 2011 and January 2, 2010 and determined that no impairment existed. Goodwill is du
e
mainly to the acquisition of the Company by H.J. Heinz Company (“Heinz”) in 1978 and the acquisition o
f
W
W.com in 200
5
. For the year ended January 1, 2011, the change in goodwill is due to foreign currency
f
luctuations. Franchise rights acquired are due to acquisitions of the Company’s franchised territories. For the
y
ear ended January 1, 2011, franchise rights acquired increased due to foreign currency fluctuations.
The Compan
y
’s
g
oodwill b
y
reportable se
g
ment at the end of fiscal 2010 and fiscal 2009 was $25,225 an
d
$
25,173, respectivel
y
, related to the WWI se
g
ment and $26,200 related to the WW.com se
g
ment for both
y
ears,
totalin
g
$51,425 and $51,373, respectivel
y
.
A
ggregate amortization expense for finite-lived intangible assets was recorded in the amounts of
$
14,894,
$
13,664 and
$
11,167 for the fiscal years ended January 1, 2011, January 2, 2010 and January 3, 2009,
r
espect
i
ve
l
y.
The carrying amount of finite-lived intangible assets as of January 1, 2011 and January 2, 2010 was as
f
ollows:
January
1
,
2011
J
anuary
2
,
2010
G
ross
Carryin
g
A
mount
Accu
m
u
l
a
t
ed
Amortization
G
ros
s
C
arryin
g
A
mount
Accu
m
u
l
a
t
ed
A
mortizatio
n
Ca
p
italized software costs .............................
$
52,293
$
34,423
$
44,486
$
25,39
6
T
r
ade
m
a
rk
s
.........................................
9,813 8,9
5
2 9,602 8,
5
9
3
W
ebsite develo
p
ment cost
s
............................
35
,24
5
24,3
5
0 29,878 19,26
6
Other
..............................................
7
,033 6,697
5
,741 4,81
9
$
104
,
384 $74
,
422 $89
,
707 $58
,
074
F-
12