WeightWatchers 2011 Annual Report Download - page 47

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2009 and approximately $32.5 million was with respect to fiscal years 2001 through 2008, to cost of revenues in
the fourth quarter of fiscal 2009. See “Item 3. Legal Proceedings—UK Self-Employment Matter” in Part I of this
Annual Report on Form 10-K for further details on this matter.
Restructuring Charges
In fiscal 2009, we recorded $5.5 million of restructuring charges associated with our cost savings initiatives
previously announced in the first quarter of fiscal 2009.
Consolidation/China Joint Venture
In February 2008, Weight Watchers Asia Holdings Ltd., or Weight Watchers Asia, a direct, wholly-owned
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 the People’s Republic
of China. Pursuant to the terms of the joint venture agreement, Weight Watchers Asia and Danone Dairy Asia
owned 51% and 49%, respectively, of the joint venture entity. Because we had a direct, controlling financial
interest in the China Joint Venture, we consolidated the entity from the first quarter of fiscal 2008.
In April 2011, Weight Watchers Asia entered into a share purchase agreement with Danone Dairy Asia,
pursuant to which Weight Watchers Asia acquired Danone Dairy Asia’s 49% minority equity interest in the
China Joint Venture as of that date for consideration of $1,000. Effective April 27, 2011, the date of the
acquisition of Danone Dairy Asia’s minority equity interest by Weight Watchers Asia, we own 100% of the
China Joint Venture and no longer account for a non-controlling interest in the China Joint Venture. The
noncontrolling interest that had been reflected on our balance sheet was reclassified to retained earnings.
Long-Term Debt
On January 26, 2007, in connection with our 2007 Tender Offer and share repurchase more fully described
under “Item 1. Business—History—2007 Tender Offer and Share Repurchase” in Part I of this Annual Report on
Form 10-K, we increased our borrowing capacity by adding an additional tranche A facility in the amount of
$700.0 million and a new tranche B facility in the amount of $500.0 million to WWI’s then-existing credit
facility. We utilized (a) $185.8 million of these proceeds to pay off WeightWatchers.com’s then existing two
credit facilities, (b) $461.6 million to repurchase approximately 8.5 million of our shares in the 2007 Tender
Offer and (c) $567.6 million to repurchase approximately 10.5 million of our shares from Artal. In connection
with the early extinguishment of the WeightWatchers.com credit facilities, we recorded a charge of $3.0 million
in the first quarter of 2007 relating to the write-off of the deferred financing costs associated with the credit
facilities.
On June 26, 2009, we amended the WWI Credit Facility (defined hereafter) to allow us to make loan
modification offers to all lenders of any tranche of term loans or revolving loans to extend the maturity date of
such loans and/or reduce or eliminate the scheduled amortization. Any such loan modifications would be
effective only with respect to such tranche of term loans or revolving loans and only with respect to those lenders
that accept our offer. Loan modification offers may be accompanied by increased pricing and/or fees payable to
accepting lenders. This amendment also provides for up to an additional $200.0 million of incremental term loan
financing through the creation of a new tranche of term loans, provided that the aggregate principal amount of
such new term loans cannot exceed the amount then outstanding under our existing revolving credit facility. In
addition, the proceeds from such new tranche of term loans must be used solely to repay certain outstanding
revolving loans and to reduce the commitments of certain revolving lenders. In connection with this amendment,
we incurred fees of approximately $4.1 million during fiscal 2009.
On April 8, 2010, we amended the WWI Credit Facility pursuant to a loan modification offer to all lenders
of all tranches of term loans and revolving loans to, among other things, extend the maturity date of such loans.
In connection with this amendment, certain lenders converted a total of $454.5 million of their outstanding term
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