WeightWatchers 2011 Annual Report Download - page 48

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loans under the Term A Loan ($151.8 million) and Additional Term A Loan ($302.7 million) into term loans
under the new Term C Loan due 2015 (or 2013, upon the occurrence of certain events described in the WWI
Credit Facility agreement), and a total of $241.9 million of their outstanding term loans under the Term B Loan
into term loans under the new Term D Loan due 2016 (each as defined hereafter). In addition, certain lenders
converted a total of $332.6 million of their outstanding Revolver I commitments into commitments under the
new Revolver II which terminates in 2014 (or 2013, upon the occurrence of certain events described in the WWI
Credit Facility agreement) (each as defined hereafter), including a proportionate amount of their outstanding
Revolver I loans into Revolver II loans. Following these conversions of a total of $1,029.0 million of loans and
commitments, at April 8, 2010, we had the same amount of debt outstanding under the WWI Credit Facility and
amount of availability under the Revolver (as defined hereafter) as we had immediately prior to such
conversions. In connection, with this loan modification offer, we incurred fees of approximately $11.5 million
during the second quarter of fiscal 2010.
For additional details on the WWI Credit Facility, see “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations—Liquidity and Capital Resources—Long-Term Debt” in Part II
of this Annual Report on Form 10-K.
Working Capital
The changes in the working capital deficit are primarily the result of year-over-year increases related to
payables in connection with operations, deferred revenue in connection with our business performance, the shift
in timing of tax payments and accruals related to our litigation matters, which are offset by year-over-year
decreases in the accrual for the UK adverse tax ruling related to the UK VAT matter and in the current portion of
debt obligations.
Franchise Acquisitions
The following are our key acquisitions since December 31, 2006:
Acquisitions of Palm Beach, Wichita and Syracuse. On January 31, 2008, we acquired substantially all of
the assets of our Palm Beach, Florida franchisee for a net purchase price of approximately $12.9 million. On
June 13, 2008, we acquired substantially all of the assets of our Wichita, Kansas franchisee for a net purchase
price of approximately $5.7 million. On June 19, 2008, we acquired substantially all of the assets of two of our
franchisees, Weight Watchers of Syracuse, Inc. and Dieters of the Southern Tier, Inc., for a combined net
purchase price of approximately $20.9 million. These acquisitions were financed through cash from operations.
These acquisitions have been accounted for as purchases and earnings have been included in our consolidated
operating results since their respective dates of acquisition.
Acquisition of British Columbia. On June 3, 2007, we acquired substantially all of the assets of our British
Columbia franchisee for a net purchase price of approximately $15.8 million, which was financed through cash
from operations. This acquisition has been accounted for as a purchase and earnings have been included in our
consolidated operating results since the date of acquisition.
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