WeightWatchers 2011 Annual Report Download - page 107

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
agreement in principle to settle this matter in its entirety and, accordingly, the Company recorded a reserve with
respect to this matter of $6,500. In May 2011, the parties received the Federal Court’s final approval of the
settlement and the Company made payments in connection with the settlement of approximately $6,364 in the
aggregate in the second quarter of fiscal 2011.
Hanson-Kelly & Jackson v. Weight Watchers North America, Inc. and Weight Watchers International, Inc.
In January 2010, a lawsuit was filed in the U.S. District Court for the Middle District of North Carolina by
two leaders alleging violations of certain federal and North Carolina wage and hour laws on behalf of
themselves, and, if approved by the court, other leaders and receptionists in North Carolina since January 25,
2007. In this matter, the plaintiffs are seeking unpaid wages and certain other damages. In April 2010, the
Company filed a Motion to Dismiss the claim for unpaid wages under the North Carolina wage and hour laws.
The court has not ruled yet on this Motion. Although the Company disagrees with the allegations that it has
violated federal and North Carolina wage and hour laws and the Company believes it has valid defenses with
respect to this matter, litigation is inherently unpredictable. At this time, the Company does not expect its results
of operations, financial condition or cash flows to be materially adversely affected by this action in any particular
period, and the Company has not made any provision for losses in connection with it.
Other Litigation Matters
Due to the nature of the Company’s activities, it is also, at times, subject to pending and threatened legal
actions that arise out of the ordinary course of business. In the opinion of management, based in part upon advice
of legal counsel, the disposition of any such matters is not expected to have a material effect on the Company’s
results of operations, financial condition or cash flows. However, the results of legal actions cannot be predicted
with certainty. Therefore, it is possible that the Company’s results of operations, financial condition or cash
flows could be materially adversely affected in any particular period by the unfavorable resolutions of one or
more legal actions.
Lease Commitments
Minimum rental commitments under non-cancelable operating leases, primarily for office and rental
facilities, at December 31, 2011, consist of the following:
2012 ............................................................. $25,414
2013 ............................................................. 19,649
2014 ............................................................. 15,343
2015 ............................................................. 13,466
2016 ............................................................. 9,329
2017 and thereafter .................................................. 10,404
Total ......................................................... $93,605
Total rent expense charged to operations under these leases for the fiscal years ended December 31,
2011, January 1, 2011 and January 2, 2010 was $36,572, $35,152 and $34,772, respectively.
F-23